Tackling the Challenges of Bread Production in Nigeria

Bread is a staple food in many homes in Nigeria. All genders, all ages, all tribes, both the rich and the poor consume bread, and it comes in various sizes, shapes, compositions and price tags to meet the needs of different categories of consumers. There is virtually no household in Nigeria where bread is not consumed. This explains why we have bakeries—both licensed and unlicensed—in all nooks and crannies of the country.

Participants at the NAFDAC Capacity Workshop for Bakers in Abuja

Participants at the NAFDAC Capacity Workshop for Bakers in Abuja

Apart from producing one of Nigeria’s staple foods, the bread industry creates jobs—those directly employed by the industry, armies of bread distributors, sellers and hawkers all over the streets. Talking of bread hawking, the story of one Ms. Olajumoke Orisaguna readily comes to mind as one whose life was transformed through bread hawking. The size of the market runs into billions of Naira, and the market will keep growing as the population continues to grow. However, several factors have been plaguing the profitability and viability of the industry and businesses operating therein.

These challenges were amplified and brought to the fore during the recent NAFDAC Capacity Training Workshop, organized by the National Agency for Food and Drug Administration (NAFDAC), in collaboration with the FCT Chapter of Association of Master Bakers and Caterers of Nigeria (AMBCN), and sponsored by Crown Flour Mills. The one-day workshop, which was conducted for the 6 Area Councils within the Federal Capital Territory (Abuja Municipal Area Council,  Gwagwalada, Kuje, Kwali, Abaji and Bwari), took place in the following three locations: Wuse Zone 7 (25/07/2017), Gwagwalada (27/07/2017), Kubwa (02/08/2017).

In a lecture titled, “Guidelines and Documentation Requirements,” by Mrs. Aisha A. Girei of NAFDAC, the participants were guided through the various requirements for registration and renewal of their license with the agency (every 2 years). The lecture focused on the following registration and license renewal requirements:

  • Organisation and Personnel
  • Bakery Facilities
  • Equipment Specifications
  • Water Treatment
  • Raw and Packaging Materials Sources
  • Environmental Sanitation and Personnel Hygiene
  • Product Packaging and Labeling

According to NAFDAC, all the requirements are carefully designed to safeguard the health and safety of Nigerians.

M. B. Adeyemo (Mrs.)

M. B. Adeyemo (Mrs.)

The second lecture by Mrs. M. B. Adeyemo was on Standard Operating Procedure (SOP). Mrs. Adeyemo highlighted the need for every bakery to prepare detailed step-by-step document on how each key task required for their operation is carried out. She described the format and details of SOP document and emphasized on the need to ensure that every employee involved in carrying out the tasks mandatorily studies and understands it. SOP is designed to ensure safe working environment and consistency in the production of quality products that conform to prescribed standards.

Apart from SOP document, Mrs. Adeyemo also mentioned other documentation to be kept by bakeries to include the following, among others:

  • Production Records
  • Distribution/Sales Records
  • Purchase Records
  • Supplier/Customer Records

Finally, she reminded the participants of the requirement to submit all their Standard Operating Procedure (SOP) documents to NAFDAC, and to review them as soon there is a change in operation.

The third and final lecture titled, “Food Safety Management in Baking Operations,” was delivered by Mrs. P. N. Ogbonna. The focus was on health and safety issues involved in the production, handling and distribution of bread, and how to ensure that the highest level of health and safety standards are maintained at all times. From her presentation it was easy to see clearly how dangerous it could be to the consumers if these standards are compromised. It was clear from here that the various ailments plaguing our society (and even death) could be traced to improper handling and distribution of food products.

It was the questions and answers session that provided bakers the opportunity to vent their frustrations as they enunciate some of the intractable challenges facing the bakery industry in the country. Everyone agreed that all the requirements stipulated by NAFDAC are good and necessary for the health of the nation, but the cost implication was an issue that attracted special attention. Added to this is the increasing cost of raw materials. While manufacturers of raw materials are free to increase their prices at will, the same cannot be said of the bread producer. Bread price is unofficially regulated by market dynamics, and a single bakery cannot unilaterally increase the price of its products without the risk of losing out in the market.

Another big issue that came up was the activities of unregistered, unlicensed and undocumented producers of bread, who are not under any obligation to adhere to NAFDAC health or safety standards. They produce cheap, but poor quality bread, popularly called “Agege Bread,” which may be injurious to health but, nonetheless, attract high patronage because of their low prices.
NAFDAC response to this menace was, however, not encouraging. NAFDAC officials claimed that the agency’s statutory mandate to regulate applies to branded products (bread with known name, logo and address, among others) only. The conclusion everybody drew from this response was that the producers of unbranded bread remain free to disrupt the market without any form of sanction.

It is obvious that the activities of these unregistered and unregulated bakeries pose a serious threat, not only to the survival of the entire industry but also to health of Nigerians who patronize these products. The registered and licensed bakers, who have to bear the extra cost of meeting NAFDAC requirements, often find it difficult to compete with these unlicensed producers on price. This is evidenced by the numbers of bakeries that have been folding up. Some of the registered producers have been compelled to cut corners—such as defaulting on some of NAFDAC’s requirements—just to survive. Obviously, there is need to do something to prevent the collapse of the industry.

The Association of Mater Bakers and NAFDAC need to obtain legislative approval and power (if that is what is required) to shut down these unlicensed and unregulated bakeries. Apart from educating the populace on the danger of consuming unregistered bread, it will be necessary to do something to ensure that the production and distribution of these products are disrupted. How can we be sure that these products do not contain bromate—a known carcinogen which has since been banned for use in the production of bread?

Even without the activities of unregulated bread producers, the bakery industry needs to adopt a strategy to control production cost. NAFDAC is a statutory body set up to enforce the law as it is for the health and safety of Nigerians. Based on responses from NAFDAC officials, it is clear that NAFDAC is not in the business of telling bakers how to minimize or optimize their production costs. Cost optimization is something the bakers and their association will have to figure out. It is a fact that many bakers have deliberately scoffed at the idea of deploying modern software solution to help them in the analyses and control of their costs. One bitter truth we must accept in this computer age is that man is fast getting used to doing more with fewer hands. Sadly, that means fewer employees. However, that might also means choosing between remaining in business and closing shop.

Ishaq Abdulraheem (Chairman Association of Master Bakers and Caterers of Nigeria, Abuja Chapter)

Ishaq Abdulraheem (Chairman Association of Master Bakers and Caterers of Nigeria, Abuja Chapter)

Modern production, especially under a competitive environment, requires accurate costing and accounting, which must conform to international best practices. Failure to do proper costing and accounting can become the single most important parameter that separates those who are thriving from those who are just struggling to survive. However, due to the absence of relevant information and modern information processing tools, many bakers have been operating on the basis of instinct and manual estimates. The result of this manual operation is that most bakeries cannot state accurately how much it costs to produce every loaf of bread, and how much profit they are making in real terms. One of the major challenges before the industry is not necessarily how to produce more bread—the challenge is more of how to produce quality bread at a profit.

We can only hope that with the consolatory response from the Chairman of the FCT Chapter of Association of Master Bakers and Caterers of Nigeria (AMBCN), Mr. Ishaq Abdulraheem, at the end of the workshop, bakers will come together under their association and work as a team to address their common challenges for the health of their industry and that of the nation.

We decided to participate and cover this event as part of out commitment towards supporting Small and Medium Enterprises (SMEs) with relevant information and tools that will help them manage and grow their businesses profitably.

You can go to our website for information on our BakerMITS Integrated Accounting and Production Costing Solution for Bakeries.

About Uso Etim

Etim Uso is a systems analyst and a programmer with over 20 years of experience in the design and implementation of financial and business solutions. He is an IFRS/IPSAS systems specialist, and holds a Bachelor of Technology degree in mathemetics and computer Science from the Federal Univeristy of Technology, Owerri, Nigeria. He also holds a Certificate in Entrepreneurial Management from Enterprise Development Centre (EDC) of Pan-Atlantic University, Lagos. He has contributed to a number of discourses on important national and international issues, including the Nigeria Leadership Initiative's (NLI) White Paper (Volume 2) on Nigeria tax system. He was a guest columnist for the Nigeria's Businessday Newspaper throughout 2012, writing weekly on International Financial Reporting Standards (IFRS) and International Public Sector Accounting Standards (IPSAS). Mr. Uso has written a number of books and eBooks on accounting, including the following, all of which are available in the Amazon Kindle store: 1. IFRS Accounting Manual for Small Businesses 2. IFRS Accounting Manual for the Real Estate 3. How to Master IFRS Accounting for Hotels with 3 Easy Steps. www.accountingbychoice.com is his blogging and marketing platform on financial and business solutions.

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